§ 9.59 p.m.
§ Mr. Gerald Nabarro (Kidderminster)
I beg to move,That an humble Address be presented to Her Majesty, praying that the North of Scotland Hydro-Electric Board (Constructional Scheme No. 30) Confirmation Order, 1958 (S.I., 1958. No. 885), dated 22nd May, 1958, a copy of which was laid before this House on 4th June, be annulled.I put this Motion on the Order Paper last Wednesday morning. That was the concluding point of a lengthy correspondence between the Secretary of State for Scotland and myself. Probably the correspondence would have continued had it not been for the vote in this House on matters of Privilege on Tuesday evening. I should not have liked to think that any part of my correspondence had been passed on to the Chairman of the North of Scotland Hydro-Electric Board. I am, therefore, resorting to my parliamentary prerogative in the most constitutional form this evening by moving a Motion to annul this Order.
But there are other considerations. This is not a parochial Scottish issue. This 947 is a matter of an expenditure of £14½ million by a nationalised industry—the North of Scotland Hydro-Electric Board—the whole of the funds for which are provided by Section 42 of the Finance Act, 1956, as amended by the Nationalised Industries Loans Act, 1958, and perpetuated by the provisions of Clause 32 of the Finance Bill, which is before the House at present.
Further, nothing which I shall say this evening should be interpreted as derogatory in any way to Scotland's essential need for increasing electric generating power facilities. That I recognise as being essential. My estimate of the increasing demand in Scotland is about 10 per cent. per annum—in other words, the demand in Scotland doubling in a single decade.
Where the controversy exists, having regard to the essential capital investment requirement of the entire nation, is on the correct and the most economic means of providing these additional power resources. I believe that the method proposed in the Order is unnecessarily expensive and likely to be uneconomic and that it may well be criticised by my hon. Friends and myself as being extravagant. It is that extravagance which I attack this evening. I have consulted Mr. Speaker on how far I can go on a rather restricted Order of this kind, and he tells me, Mr. Deputy-Speaker, that as long as I do not develop in detail the arguments for the alternative resources, I may refer to them in passing.
May I say a word or two about the essential data of the Strathfarrar and Kilmorack Hydro-Electric project? It is to cost £140 per kW. installed, it is to operate at only 29 per cent. load factor, it is to have a total capacity of 102,000 kW. installed, and the cost is to be £14¼, million.
There were objections to this scheme, in accordance with the statutory procedure under the 1943 Act, and a public inquiry was held in Edinburgh from 9th to 13th December, 1957, under the chairmanship of Mr. R. S. Johnson, Q.C. The objections on that occasion were almost entirely of an amenities and fisheries character. They dealt with the salmon fisheries of the River Farrar, spawning on the tributaries of the River Farrar and the amenities and scenery in Strathfarrar. The Report makes perfectly clear, 948 in the Explanatory Memorandum, that the inquiry did not deal with the economic and financial issues. Further, it excluded all considerations of nuclear power. I quote from Mr. R. S. Johnson's report:He did not attempt to assess the contribution that might be made by nuclear power.That is to be found in paragraph 13 of the Explanatory Memorandum, Cmnd. 408.
This evening I seek to deal with those financial and economic issues having regard to three considerations: first, the onset of nuclear power since we last debated a hydro-electric project on a Statutory Instrument; secondly, the markedly changed coal supply position, notably of very small and poor quality coal used for power station generation; and, thirdly, the employment position in Scotland, and notably in the City of Dundee, to which I shall refer in a moment. I am pleased to see the hon. Member for Dundee, East (Mr. G. M. Thomson) in his place.
The alternatives on which I propose to dwell this evening are a combination of pumped storage, using the water referred to in the hydro-electric scheme, worked in parallel with a nuclear power station. The right hon. Member for East Stirlingshire (Mr. Woodburn) brought me welcome but totally unexpected support at Question Time two weeks ago. I quote from Column 1059 of the OFFICIAL REPORT of 1st July, in which the right hon. Gentleman is reported as having said:Is not the Under-Secretary aware that this is probably the finest justification for a hydroelectric scheme—that it should be used in conjunction with pumped storage and the use of that atomic electricity that is produced during the night but which would otherwise be useless? Would it not be wise to publish a White Paper, or something of that nature, that would give a complete picture? The public are very interested in this matter"—now come the operative words; praise indeed from the right hon. Gentleman—and I think that the hon. Gentleman the Member for Kidderminster (Mr. Nabarro) has raised a very important question.He is doing so this evening. The right hon. Gentleman then continued:… But the hon. Gentleman"—referring to the Joint Under-Secretary—does not seem to have grasped the point".I found that he had not grasped the point as well.
949A particular scheme is one thing, but the hon. Member for Kidderminster has raised the principle of whether or not the Government's new hydro-electric schemes should be developed in conjunction with nuclear power. It would seem that some explanation ought to be given to the House, apart from what hon. Members can find out for themselves when a particular scheme comes along."—[OFFICIAL REPORT, 1st July, 1958: Vol. 590, c. 1059.]I heartily endorse the words of the right hon. Gentleman. I feel sure that nothing that he may contribute to the debate this evening will in any way detract from the important pronouncement he made on that occasion, which entirely supports my argument.
I should now like to say a word about the labour position. If one builds an expensive hydro-electric station in the far north—and this is a long way north; it is well to the north-west of Inverness—little local labour is available for the purpose. It is quite insufficient for the needs of the project.
§ Mr. Nabarro
I will come to that point in a moment. I wish to put the matter in proper perspective.
It is true that there are a few hundred unemployed over a wide area within range of the site of the hydro-electric proposal. Generally, it would be expected to bring in imported labour from the south of Ireland, which would then be housed at high cost in hutments in the extreme north. A proposal has already been turned down and deferred on capital investment grounds for building a base load station on the Firth of Tay within a few miles of Dundee where there is chronic unemployment among males at present.
There are no fewer than 3,259 males unemployed in Dundee according to the last census taken two or three weeks ago. It is those men who ought to be employed on a base load station at the Firth of Tay. They are readily transportable from their homes in Dundee. The site has been surveyed and approved, but the proposal has been deferred on capital investment grounds. It could either be a coal or nuclear station, but it would be a base load station. It would work in conjunction with a pumped storage station in the Highlands. But use should be made of that concentration of unemployed male labour in Dundee first rather than 950 import large quantities of labour from the south of Ireland to be put in huts a couple of hundred miles away to the north.
I am not alone in holding these views. It is an extraordinary thing that the Chairman of the North of Scotland Hydro-Electric Board holds the same views. He said so. [Interruption.] I wish my hon. Friend the Joint Under-Secretary would not snort. I will willingly give way to him, but he must not make bovine noises from the Treasury Bench. The Chairman of the North of Scotland Hydro-Electric Board shares my views in this matter.
We have had a lot of reference today to the valuable Report of the Select Committee on Nationalised Industries. That same Select Committee investigated the affairs of the North of Scotland Hydro-Electric Board and gave it a very good and clean bill of health in general matters of development. I readily concede that. But it investigated very closely the matter of pump storage. The right hon. Thomas Johnston gave evidence on this point. He said:On our schemes up to date the hydro-schemes have cost, in pounds per kilowatt installed, £175 or thereabouts. The latest nuclear power stations are going to cost something very nearly the same when you take the first supply of fuel into account, in fact, it comes to about £170 per kilowatt, so in that respect there is very little difference. But compared with coal generation, there is a big difference. We are going to find it necessary to provide more capital for this nuclar programme and I think it is causing a great deal of concern as to where this extra capital is to be found. Now, pumped storage, if it were adapted, does strangely enough cost only £30 to £40 a kilowatt and it seems to us, anyhow, that there is at least a way of making more use of the nuclear power you are putting in and at the same time saving in capital cost. That is one of the things that we are turning our attention to because we do have favourable sites for pumped storage. It may mean bringing the power quite a long way, because unless we put in our own nuclear station we may have to import it from the South Board. If they put in their Hunterston station and they have more power than they want at night, we can take it from them and sell it back to them the next day at a time when they are desperate to get the power to meet the demand.In paragraph 276, my hon. Friend the Member for Glasgow, Scotstoun (Sir J. Hutchison) put this question to Mr. Thomas Johnston:Who have you got to consult to go on with a pumped storage scheme?951 Mr. Thomas Johnston replied:As far as consultation is concerned, we cannot produce the energy that is needed to pump the water up, we must get that from someone who has got the nuclear power available at night. That is the first thing. May I put it this way: we are willing to process the electricity for anybody who is wanting it processed, that is to say, we will convert it from what we call night power to peak power and we will do that for them, so that unless we get someone willing for us to do the processing then, of course, it does not go ahead.The hon. Member for Cleveland (Mr. Palmer) then interposed:That somebody must, of course, be the South of Scotland Board or the Central Electricity Authority?Mr. Thomas Johnston—here are the operative words—replied:Yes, there is no limitation on the distance.…In other words, it is possible to have a pumped storage station costing only £30 to £40 per kW installed in the far north using the night power for pumping the water up from the Hunterston station in the far South of Scotland and in the evidence of Mr. Thomas Johnston distance is no obstacle whatever.
I promised not to develop the nuclear alternative in too much detail, but let me say this. The nuclear power station at Hunterston will be there already. It will be completed in 1963, long before the Strathfarrar and Kilmorack proposal will be completed. Therefore, I want to know—does my hon. Friend wish to intervene?
§ The Joint Under-Secretary of State for Scotland (Mr. Niall Macpherson)
My hon. Friend has anticipated that the Strathfarrar scheme will be completed three and a half years after it is started. If, therefore, it is started this year, it will be completed by 1962.
§ Mr. Nabarro
My hon. Friend is not grasping the point. It would not be a conventional hydro-electric station. It should be a pumped storage station in that locality. That would cost only £30 to £40 per kW installed, being one-quarter of the cost of my hon. Friend's conventional station at Strathfarrar and Kilmorack. Due to the lower cost, it would entail much less labour and material and could be completed much more quickly.
My case is that the Select Committee, under the chairmanship of my right hon. and learned Friend the Member for 952 Kensington, South (Sir P. Spens), have in the light of the evidence made a specific recommendation to the effect that pumped storage should be developed in Scotland in conjunction with nuclear stations as a cheaper and more effective alternative to conventional hydro-electric stations.
§ Mr. Nabarro
Let me finish. The conventional hydro-electric station at Strathfarrar and Kilmorack will cost £14½ million. If we had the alternative which I am proposing—that is, a pumped storage station—the capital cost entailed would be no more than £3½ million. As the Hunterston Station will be there already, idling overnight anyway, it follows that the true comparison of cost is as between the pumped storage alternative, which I welcome, at £3½ million, as compared with the conventional station, to which the Statutory Instrument relates, at £14¼ million. As the difference of £10.75 million is to be found overwhelmingly by the English taxpayer under the provisions of Clause 42 of the Finance Bill, 1958, it is extremely appropriate and propitious that an English Member should protest against this unwonted extravagance in the far north.
§ Mr. John MacLeod
What would be the cost of production in this scheme as opposed to the hydro-electric scheme?
§ Mr. Nabarro
The cost of operation would be approximately the same. There would be no economy to be derived by a conventional station. The evidence adduced not only before the Select Committee but elsewhere is that the three alternative methods—first, a conventional hydro-electric station of the Strathfarrar and Kilmorack type; secondly, a nuclear station or, thirdly, the pumped storage station working in conjunction with a nuclear station—all have costs of operation approximately equivalent; but by far the most economical in terms of capital investment is the third alternative of a pumped storage station working in conjunction with the idling Hunterston station, as it will be, during the night hours.
§ Mr. N. Macpherson
Will my hon. Friend give me the evidence on which he bases his supposition that the Hunterston station will be idling overnight?
§ Mr. Nabarro
The Hunterston station has been designed as a base load station. It will operate on an 80 per cent. load factor. It has not yet been directly linked to any particular pumped storage scheme, so I asked my hon. Friend last week whether he would tell the House what was the total kilowattage surveyed for pumped storage scheme in the whole of the Highlands. The answer I got was that it is 1,600,000 kW installed, sixteen times as much as the Strathfarrar and Kilmorack proposal, so it would have to be argued by my hon. Friend—and as this is going to be, I think, his line of reply—that there are quite inadequate facilities from resources for pumped storage stations in the Highlands. There are ample pumped storage facilities available amounting to 1,600,000 kW installed in aggregate, and at Loch Awe alone, there is a potential capacity of 400,000 kW installed, already surveyed.
Thus in aggregate there is fifteen times as much as the Strathfarrar and Kilmorack proposal, available for pumped storage, and they could easily be linked to Hunsterton, which is not already fully occupied, in parallel with pumped storage stations. Even if it were, there are the other base load stations in Scotland, which are idling at night and not using their power. The total occupation of these extremely expensive capital investments by the nation is a primary preoccupation of mine and ought to be a primary preoccupation of all interested in the problems of scarcity of capital for investment.
I want to say, first, on grounds of economy in capital cost, that the Strathfarrar and Kilmorack project should be scrapped and a pumped storage scheme working in parallel with the nuclear power project at Hunterston or elsewhere substituted for it.
Secondly, on grounds of employment of men, notably in the Dundee area, a new base load station should be built there instead of the Strathfarrar and Kilmorack installation.
Thirdly, on the grounds of operating costs, which are roughly equal by any of the alternatives to which I have referred, my case is justified.
Fourthly, on the grounds of efficiency since nuclear power is certain and hydro-electric power has an 954 element of doubt, as witness the very grave drought a couple of years ago when a substantial amount of electricity had to be imported from the south of Scotland and completely deranged the finances of Mr. Thomas Johnston's Board. I invite the House to reject this preposterously extravagant Strathfarrar and Kilmorack project and to support my Motion this evening.
§ 10.20 p.m.
§ Sir David Robertson (Caithness and Sutherland)
I beg to second the Motion, which has been so ably moved by my hon. Friend the Member for Kidderminster (Mr. Nabarro).
I, too, oppose this latest scheme of the Hydro-Electric Board for several substantial reasons. The House of Commons has exercised hardly any control whatsoever over this Board. We had three hours on 27th January of this year for the first time to debate the Report and Accounts of this Board, which was created in 1943 and which has spent some £176 million of public money. We are asked tonight to approve a scheme which is estimated to cost £14¼ million.
Before the House can pass judgment on this it should know what estimates have been made and laid before Parliament for other schemes which have been completed and other schemes which are uncompleted. There have been twelve schemes completed since the Board was created. The House was told they were going to cost £21 million. They actually cost £44 million. I will give one or two examples.
There was the Sloy, Lochalsh (Nostie Bridge) and Morar scheme estimated to cost £4,600,000. It cost £8,870,000. There was a smaller one at Fannich estimated to cost £960,000 but which at the finish cost £3½ million. Another, the Mulladoch-Fasnakyle-Affric scheme, estimated to cost £4,800,000 on completion cost £9,780,000. A scheme at Lawers estimated to cost £2,850,000 on completion cost £5,910,000.
I will give no more. Those are enough for the House to judge the kind of thing we are being asked to approve tonight. This is not our money. It is the people's money, nearly £200 million of it.
There are eleven schemes under construction, and they have been under construction for years. During that time almost £100 million of capital has been 955 wholly unremunerative. Interest has been paid, but not one penny of revenue has come in on these eleven schemes. I will give no details beyond stating that there was an estimated figure put before Parliament of a total of £68½ million. Some of these schemes may have been completed now, but on 5th March of this year, when this statement was prepared for me by the Scottish Office, the estimate had risen from £68 million, which Parliament approved, to £98 million.
At this time of financial stringency, when we are a long way from being out of the wood, the Secretary of State for Scotland is asking us to approve of another scheme costing £14¼ million.
I can tell the House how some of these excess costs were incurred. Some, of course, were due to legitimate, rising costs. No one can challenge that in the years when these schemes were being completed, some completed, some uncompleted, costs have been rising. However, this Board has followed a policy the most inflationary I have ever known in my experience, and instead of working a shift system, as I have urged the Chairman time and again to do, it has run what is called "regular overtime." Year in, year out, men have been working not the eight hours a day for which hon. Gentlemen opposite fought so far and tried to bring about in other years, but 12 hours, at hard manual work in tunnels or above ground. They lay off on Saturdays and work double time Sundays.
I think that is one of the main reasons for these tremendous costs which have been incurred. I think the publicans are the principal beneficiaries. I would remind my hon. Friend the Member for Ross and Cromarty (Mr. John MacLeod), with whom I so seldom disagree, and who so seldom disagrees with me, that although we have labour in the Highlands we have not these craftsmen or technicians, and though we do some of the labouring work, when a scheme ends we are once again left with unemployed.
The Hydro-Electric Board has not achieved the objects which it set out to achieve, including the bringing of light industry into its area. We not only want power but we want to use it. Many of us have tried and failed to bring these amenities to the area, but it is not much consolation to my constituents, many of whom are without electricity. The obligation 956 was laid on the Board, in the opening paragraphs of the Act that created it, to bring light and power to the ordinary people living in the Highlands, even in the remote places.
It is true that the words "in so far as practicable" were used, but I know many of the cases where the Board has failed to bring the people light and power, and they are all practicable. Farmers and crofters do not live or work on main streets. They live in the hinterland, and if they are not prepared to pay amounts for connections which are quite beyond their resources they are told that light and power will not be available to them. Throughout the Highlands, from South Inverness right up to Caithness, any number of people are waiting for power and light which they will not get. There is not enough money. It is too expensive to supply the light and power, yet £176 million have been spent already and we are now asked to give a further £14½ million.
The truth is that the Board has plunged on from one scheme to another in the most reckless fashion. I have never known anything like it, and I challenge anyone else to say that he has. One would have thought that, having spent about £100 million, the Board would have said, "We will take a rest now and do our main job of creating and distributing electricity," but the eleven schemes detailed in the Board's last Report, and estimated to cost £98 million, have been in progress for many years.
This has a bearing on the accounts. We hear a great deal about the Board not being able to do various things because it has no money, yet it has a tremendous amount of capital which is not earning a penny but is costing large amounts in interest charges. The Board has covered depreciation and redemption charges running to several million pounds a year. The shareholders of the Board are fully secured money-lenders, and the only person to suffer is the very insecure crofter.
This is the story of the Board's failure. It has followed a policy of squander-mania. In the interests of the Board itself, the House should annul this Order. If ever there were a case for a board of directors to sit back and say, "Let us now make the machine work, let us stop further capital expenditure," this is it. 957 Can the House imagine any commercial company, and above all the great companies of Britain, ever advancing in this fashion with schemes like this, starting from zero and finishing with £200 million? If the Board were to consolidate, its costs would be greatly reduced. The whole of the capital would become revenue producing and rates charged for electricity, not only to those in the High- lands but to those in the South of Scotland who require this power so much for the welfare of our country, would be greatly reduced.
I feel that I have said enough to show my colleagues the need for drastic action. There has been practically no Parliamentary control in the past, but there is an opportunity tonight. Most of the schemes to which I have referred went through on the nod. It may be that tonight some hon. Members who have not heard one word of the debate will vote in support of the scheme—something that I have done before now—but does any hon. Member present think he will be doing what his constituents want him to do if he allows the scheme to go through? This is our chance. We have had hardly any chances for fifteen or sixteen years, but if we vote to stop the scheme tonight it will be in the interests of the Board as much as anybody else.
§ Mr. William Ross (Kilmarnock)
We have a Select Committee on Nationalised Industries, and I understand that the hon. Member presented evidence to it. Will he tell us how it reacted to the kind of statement he has been making tonight?
§ 10.32 p.m.
§ Mr. A. Woodburn (Clackmannan and East Stirlingshire)
The hon. Member for Kidderminster (Mr. Nabarro), as he said, is perfectly entitled when a matter of this kind comes before the House to ensure that it is examined and justified. After he had put his Questions, I was so interested that I made an investigation into the facts. After hearing his speech, I can only regret that he did not do the same, for it would probably have shortened the debate a little.
The question we face tonight is: does Scotland require more power in the years lying ahead? The answer was given by the hon. Member when he said that demand 958 is increasing at the rate of 10 per cent. per annum and will, therefore, be doubled in ten years. If that is the case, we must provide the means to produce the power.
The hon. Member for Caithness and Sutherland (Sir D. Robertson), who never lacks vigour in swinging his claymore round his head at whatever enemy he has in view, has laid with his claymore a number of the ghosts that he raised. His speech seemed to be a little contradictory. He wanted to stop the production of more electricity in the Highlands, but at the same time he wanted his crofters and others to get electricity. If the supply of electricity were confined to those now getting it, his crofters could never get it. It is contradictory in the same breath to suggest that the Board should stop expanding and to demand that it should supply his crofters.
§ Sir D. Robertson
That is not correct. My crofters are not getting electricity because they cannot afford the extortionate demands for connections. There is no shortage of electricity. Millions of units are going to the South.
§ Mr. Woodburn
There is a further point of contradiction. The hon. Member spoke of the extravagance of the Board, the amount of money it is spending. If he had gone into the accounts he would have found that it has to spend a disproportionate amount on distribution compared with other boards. If his crofters are to get electricity in the way he suggested, then, far from the cost of hydro-electricity being reduced, the cost of its distribution would be increased disproportionately.
The House laid upon this, as on other boards, the obligation to balance accounts. Not only has it to do that, but it must make a profit which can be spent in the Highlands making up for the uneconomic costs of linking up the very crofts about which the hon. Member was speaking. My information is that the Board took over about 188,000 consumers in the Highlands and that, since then, it has added another 173,000 consumers, leaving about 66,000 still to be added. Those people cannot have electricity unless the Board produces more. Scotland needs more electricity, as is evidenced by what has been said tonight. If that electricity is to be produced, the question is what is the most economical way of doing it.
959 The hon. Member for Caithness and Sutherland produced a large number of figures about the past. I could not check or comment on them without going into the accounts. My hon. Friend the Member for Kilmarnock (Mr. Ross) has said that those comments were put before the Select Committee and that the Select Committee made certain observations. As a matter of fact, the Select Committee paid great tribute, as the hon. Member for Kidderminster said, to the work of the Board and said that it was producing electricity economically.
§ Mr. Woodburn
I am coming to that. The Select Committee said that the Board was producing electricity economically to meet the increased need for power, power for houses and factories.
As the hon. Member for Kidderminster said, demand falls into three categories. The main category is the base load category, which is 24-hours per day production. All demand for electricity fluctuates, and even on a 24-hours per day basis, production must have its ups and downs. There has to be a margin, therefore, of power to meet varying demands. The hon. Member was quite justified in saying that where that margin, that extra, that surplus existed in the base load stations, it should be used for pump storage. He mentioned Hunterston as one of the base load stations. My information is—and perhaps the Joint Under-Secretary will confirm it—that there are already arrangements to use the surplus power of Hunterston and the new station at Kincardine near my constituency for pumped storage in the Loch Awe scheme. That first point has been considered, therefore.
Of course, pumped storage is an economical use only for a small number of hours a day, when there is that high demand, what is known as the peak demand for electricity. Water could not be pumped for the supply of electricity for a large part of the day because it would be a waste of energy to pump water up just to let it run down again. Obviously, it is only where there is surplus electricity which would not otherwise be used and which is produced at cheap rates that pumped storage can be used.
960 The middle load, which is the difficult load, is for about 16 hours a day. This is where the hon. Member's calculations were wrong. My information is that it would be uneconomical to install nuclear or steam power to produce electricity for that period of 16 hours a day, because the plant would be exploited for only about two-thirds of the day. Costs and depreciation would be spread over a smaller number of hours, and that would not help to get the cheapest production of electricity. It is only when there is production for 24 hours a day that one gets the cheapest possible stations, and nuclear power or steam power is the way to produce that electricity. Both types of station are being built in Scotland. A big station is being built in Fife to use the very coal we have been discussing in the previous debate. If there is a surplus of electricity it can naturally be diverted for pumped storage.
The question arises: what will be the cheapest way to meet the demand required in the immediate future? The base load stations supplying a 24 hours a day demand have been catered for by the Hunterston, Clackmannan, Kincardine and Fife schemes, and it would be a waste of money to build another nuclear or steam station to produce electricity for which as yet there is no demand.
§ Mr. Nabarro
We are listening to a very lengthy reply from the right hon. Gentleman, but surely he should apply himself to the evidence given by Mr. Thomas Johnston himself. He, backed by all the Members of that Select Committee, came to the conclusion that pumped storage at nuclear power stations should be provided for the future. Would the right hon. Gentleman address himself to answering the Select Committee and not impute to me things that I did not say?
§ Mr. Woodburn
This Order has nothing to do with the schemes for which pumped storage would be useful. This Strathfarrar scheme, to which the hon. Member is objecting, is to produce for a 29 per cent. consumption—that is, a consumption for 8 hours a day. That is a demand which cannot be economically 961 fulfilled by either nuclear power or steam power, because we would not be using the plant for two-thirds of the day and, if we were spreading the on-costs over one-third of the day instead of the 24 hours, the price of electricity would rise considerably.
Therefore, an electricity board of that kind must consider what is the cheapest way to produce electricity to meet a certain demand. We are producing the cheapest electricity from nuclear and steam power stations to provide a 24 hours a day base load service, but for the 8-hour service we have to find some way of producing the electricity which does not involve a whole lot of wasted plant. At the moment that middle electricity demand is very often met by bringing into operation older steam power stations, but when they are brought in they enormously increase the cost of producing electricity. Sir Christopher Hinton says that there are over 50 of these stations and that when they are brought into operation they cause the price of the production of electricity to rise to 1s. 9d. per unit. In the worst cases, it can cost up to 4s. per unit.
In other words, like the marginal farms of the Highlands, we have a lot of marginal electricity stations which we bring in at extra cost to meet the extra demand. The cheapest way to meet that kind of demand is not to bring in these old and inefficient steam power stations, but to build something like the Strathfarrar scheme, which will produce electricity at quite a cheap rate.
My information is that in the case of a 29 per cent. rate factor—a one-third of the day demand—if electricity is produced by water power it costs three farthings a unit; by coal it costs 1.08d., and by nuclear power it costs 1.63d.
§ Mr. Woodburn
The cost of hydroelectric power after the station is built tends to fall, whereas the cost in the case of a coal station tends to rise. The hon. Member for Kidderminster nods or wags his head—I do not know what is the right description—
§ Mr. Woodburn
That means that the hon. Gentleman is indicating that he does not know. If he had inquired into the facts, he would have been able to approve 962 of what I am saying instead of indicating dissent.
In the long run, water power is bound to be cheaper than either nuclear or steam power for this purpose. Anyone who opposes this Order should produce facts to show that the Strathfarrar scheme is not the cheapest way to produce the electricity. By his speech the hon. Gentleman has indicated that he has not made the necessary inquiries, because had he done so he could have verified a great many of these facts and not bothered to move his Motion.
The hon. Gentleman mentioned bringing in Irish labour. That point came in quite incidentally in this matter. The amount of Scots labour has never been less than 66 per cent., and it usually is as high as 80 per cent., so the story about Irish labour is a canard. These schemes are not cheap unless expert navvies and people skilled in mining are used. It is ridiculous to suggest that unemployed jute workers from Dundee could do the work. We cannot go on building nuclear power stations merely to provide employment if there is no demand for the electricity. I am in favour of power stations being built at Dundee immediately they are necessary. At the moment, we are experimenting with a gas turbine station, and it may be that in due course that could result in another scheme.
The hon. Member for Caithness and Sutherland and the hon. Member for Kidderminster seem to me to have contradicted each other. While I approve of getting a proper explanation from the Minister about the value of these schemes, I think that a lot of the statements made tonight have contradicted each other. I hope that the House will not disapprove of this scheme, because without it we shall not get the electricity that Scotland needs. We cannot get more electricity without more stations. If, as I am convinced, this is the cheapest way to obtain that electricity, I object to being forced to use other wasteful and extravagant methods.
§ 10.48 p.m.
§ Mr. John MacLeod (Ross and Cromarty)
I have no intention of going into the technical details of this matter, as I am not qualified to do so. My information is similar to that of the right hon. Member for East Stirlingshire (Mr. Woodburn). I hope the right hon. Gentleman has convinced the House that the 963 Board's scheme is the cheapest form of producing electricity. I believe that hydro-electric schemes are still necessary, particularly if we are to get electricity for the people in the Board's area.
I agree that the base load in the Board's area is proportionately less than that elsewhere in the country. I understand that a nuclear station must be large and run continuously before it is economic. Another fact which has been mentioned before is that the area of the Board is very wide and the most difficult in which to distribute electricity. These distribution schemes have to be paid for, and the Board is paying for them by selling electricity outside its area as cheap electricity but at a profit. I understand that at present the Board is spending about £1 million a year on distributing electricity and is losing about £100,000 a year in so doing, which is met by the profits made out of selling electricity outside the area.
Like my hon. Friend the Member for Caithness and Sutherland (Sir D. Robertson), I am disappointed that I have some areas which have no electricity, but I am convinced that electricity would never have been brought into some of these areas at all had it not been by the method used by the Board at present.
May I touch on the point made by my hon. Friend the Member for Kidderminster (Mr. Nabarro) about employment? In an area which badly needs employment, the Board at present employs between 5,000 and 6,000 people. I understand that the Strathfarrar scheme will employ about 1,000 people in direct employment for the next four or five years. The hon. Member for Kidderminster might note that about 72 per cent. of those employed are Scotsmen and that in the Shin scheme 95 per cent. were Highlanders. I hope that my hon. Friend the Member for Caithness and Sutherland will bear that in mind, particularly now that the provision of employment is becoming a serious problem in the Highland area, where there are not many other forms of employment. It is pointless to use Dundee as an example. The hon. Member for Kidderminster said that we did not want to see people who had been trained for the jute industry drawn into work in the hydro-electric scheme. Other 964 forms of employment are being brought into Dundee; there are forms of employment which could not possibly be taken into the Highlands. It is a ridiculous argument for the hon. Member for Kidderminster to use.
We must also remember that a tremendous amount of other development is taking place in the Highlands which would not otherwise have occurred. That was one of the reasons for the introduction of the 1943 Act and one of the reasons it was passed so easily; it was appreciated that although the schemes were expensive, they would benefit the whole area in every way from the economic point of view. As a result of the schemes there are roads in areas which would not otherwise have had roads, the areas have been improved enormously and tourists have are being attracted to them who would not otherwise have been attracted there. These matters should be borne in mind when hon. Members criticise the capital investment in these schemes. Of course, costs have risen enormously, but we must not forget that the capital costs of other schemes, in other spheres, have also risen. I main-tam that the Board must go ahead with this scheme for the benefit of the whole of the Highland area.
§ 10.55 p.m.
§ Mr. G. M. Thomson (Dundee, East)
I have listened today with fascination and wonder to two successive speeches from the hon. Member for Kidderminster (Mr. Nabarro). The more I listened, the more my wonder grew. The hon. Member and myself are old contestants across the Floor of the House. I was flattered that he should address so much of his attack on the North of Scotland Hydro-Electric Board in a form that was designed to help my constituency in Dundee.
I was surprised because, as the hon. Member himself mentioned, the staple industry of my constituency is jute and the employment in jute in my constituency has been maintained by the operations of a device called Government Jute Control; and for a number of years it is the hon. Member who has conducted the attack on this Government Jute Control. In the last few months, he has had a notable success. He has persuaded his right hon. Friend the President of the Board of Trade to tamper and interfere with it. As a result, we have serious unemployment in Dundee. Now, we have 965 the spectacle of the hon. Member for Kidderminster, having done his best to create the unemployment in Dundee, heroically coming to the rescue of the city and suggesting that further hydroelectric development should be stopped in the Highlands so that unemployment in my constituency should be temporarily relieved.
I learned a little Latin at school. I have forgotten almost the whole of it, but almost the only thing which comes back to me is one line from Virgil, dealing with the occasion on which the Greeks besieging Troy presented the Trojans with the famous wooden horse. I think there is a line in Virgil which says:I fear the Greeks even when bringing gifts.I must confess that I distrust the hon. Member for Kidderminster even when he is bringing my constituency fresh employment.
Nobody more than myself would like to see a great new nuclear power station erected in the vicinity of Dundee. I would not want it primarily as a means of easing our unemployment problem, although, no doubt, it would offer some help, but it would, of course, be temporary help. It would provide employment during the period of construction for several years. What I am much more interested in is preserving for Dundee the permanent protection of State trading in jute, which will give to people who have been employed in the jute industry all their lives a secure future, which has been threatened so much in recent years by the hon. Member for Kidderminster.
My information, like that of my right hon. Friend the Member for East Stirlingshire (Mr. Woodburn), is that the time for a further nuclear power station near Dundee or elsewhere—but, I hope, near Dundee—is not at present and that it does not fit in with Scotland's electricity requirements of the moment.
§ Mr. Nabarro
The fact of the matter is that the station, a base load station, is surveyed, has been approved and was temporarily deferred on capital investment grounds only. There is no question of the project being withdrawn. It is a temporary deferment. I want the money spent there rather than in the far north, where it will be largely wasted.
§ Mr. Thomson
There is a conflict between the information which the hon. Member for Kidderminster is giving the 966 House and the information which I have. This conflict of information is of great importance to my constituents and I hope that when the Minister replies to the debate, he will clarify it.
My information is that the Scottish electricity requirements do not need a further nuclear power station at the moment and that the time for such a power station will be in the latter half of the 'sixties. If there is any chance whatever of getting that power station in the Dundee area in the latter half of the 'sixties, I assure the Minister that I will pursue him for such a short time as may be left for him at the Despatch Box and that I will pursue whoever succeeds him from this side of the House at the Despatch Box in the years thereafter in bringing it about.
I should like to know from the Minister whether the hon. Member for Kidderminster is accurate in saying that a site has been surveyed in Dundee and that a scheme has been held up for economic reasons, because that certainly is not the information that I have had.
To turn to the general issues raised by the Order, I think the trouble with the hon. Member for Kidderminster is that he is one of the Parliamentarians I most like to listen to. But James Maxton, when in this House, once remarked that to be a Parliamentarian in this circus one had to be able to ride two horses at once. The hon. Member for Kidderminster's defect is that he only rides one horse at once, with very great dexterity but very fast in all sorts of odd directions. He always concentrates on one issue to the exclusion of everything else, which is very stimulating but seldom gives a balanced picture of the position.
It is certainly true that in the field of electricity generation we require not only coal and nuclear generating plant but also the conventional hydro-electric plant for as far ahead as one can see. I think we might pay attention to the plans of Russia in this respect. I understand the Russians are going ahead with nuclear power stations and with great hydroelectric schemes. There is nothing mutually exclusive about them; they are complementary. I am not referring simply to pumped storage and nuclear power stations but to conventional hydroelectric and nuclear power stations.
I think that is the reality the hon. Member for Kidderminster ought to face and 967 towards which he should direct some of his energies. If he would divert some of his energies to promoting plans for a balanced power programme in Scotland then we would welcome his changed outlook.
On a separate issue, I should like to refer to the delays that have taken place in bringing this scheme before the House. The scheme was originally tabled by the Secretary of State in February of last year. There were a number of objections to it and a public inquiry. It is six months after the public inquiry that we finally have the Secretary of State's approval. I am told that in fact there was a period of some years before the scheme was formally brought out, during which time the Hydro-Electric Board tried its best to arrive at private settlements with those who objected. One of the settlements arrived at privately was that with Lord Lovat which has already been discussed in this House. That involved a payment of £100,000 for the loss of fishing rights over eighteen miles of river. I was startled when I heard the figure.
I think a much more serious question than the £100,000 paid to Lord Lovat was the amount of money that the objections of Sir Robert Spencer-Nairn have cost the community. The hon. Member for Caithness and Sutherland (Sir David Robertson) mentioned the difference between the estimates for many of these schemes and the final figures. That has been due to the general inflation we have had during the post-war years; but when there is a long delay between the time a scheme is originally proposed and the time when it can be started, because of the obstruction of a few private landowners bent on defending their own private sporting rights, then the community pays a very high cost indeed. If we calculate the yearly inflation at roughly 5 per cent. per year, I think it fair to send a bill of 10 per cent. as the cost of obstruction by those who raise these objections, which came to a public inquiry last December—and 10 per cent. of the capital cost of the scheme presently before us is very nearly £1½ million.
I think we have to ask seriously, while preserving the rights of private property and the right for objections to be publicly examined, whether investigation of these ought to be speeded. We are 968 engaged in a technological race with other countries of the world, and I doubt whether we can afford these very long and expensive delays we have been having over a number of these schemes in recent years.
I would say one word to the hon. Gentleman the Member for Caithness and Sutherland, whose militancy in these matters I always personally respect. I thought his attack tonight on the Board and on his hon. and right hon. Friends on the Front Bench was a really unreasonable attack.
§ Mr. Thomson
I will say why. The hon. Gentleman is concerned, and properly concerned, with looking after the interests of his constituents, and he is concerned with getting them provided with electricity. The only way in which the provision of their electricity can be financed is by the extension of the Board's programme. I am told that the Board spends about £1 million a year in joining people to the supply, that the replacement costs work out at annual charges of about £200,000 a year, and that the actual revenue from those connections comes to about £60,000 a year. Therefore, the annual subsidy to the hon. Member's constituents is £140,000 a year.
I think that subsidy is well worth while, helping as it does to preserve the way of life of the hon. Member's constituents. I think it is important that they should be subsidised; but that subsidy has to come from somewhere, and I think that by far the most effective way of doing it is the way the Board does it, by expanding its generation, by selling its surplus of electricity to the South, and by using the profits to provide the hon. Member's constituents with electricity.
§ Sir D. Robertson
I think the hon. Member had better read what I did say. As to the way of life of my constituents, the men for whom I am fighting and have fought for years are burning oil lamps tonight.
§ Mr. Thomson
I accept the hon. Member's views of his constituents' conditions rather more readily than I accept the views of some hon. Members opposite who sit for southern constituencies of the United Kingdom.
969 The hon. Member complained that the affairs of the Board had not had adequate Parliamentary scrutiny. I am a new Member of this House, but so far I have not observed that, whenever any abuse has been brought up or alleged, it has not quickly been given Parliamentary scrutiny, and I suggest that the fact that the Board's Reports and Accounts have not been debated more is evidence that the Board has carried out its duties efficiently and well.
§ Mr. Thomson
I would commend the hon. Member, before he sits through a debate of this kind and intervenes in it by means of interruptions, at least to look at the Report a Select Committee of this House has prepared on the affairs of the Board. We have the Select Committee on Nationalised Industries (Reports and Accounts), which conducted a thorough investigation of the affairs of the Hydro-Electric Board, and this was the conclusion it came to:In the fourteen years of its existence, the North of Scotland Hydro-Electric Board has impressively justified the faith of its progenitors.That is the answer to the hon. Member for Caithness and Sutherland.
§ 11.10 p.m.
§ The Joint Under-Secretary of State for Scotland (Mr. Niall Macpherson)
First I should like to say that the Government are very glad that my hon. Friend (Mr. Nabarro) has submitted this Motion, because it gives us an opportunity of dealing with this scheme. The full attendance in the House shows the interest taken in the scheme and the fascination which the Highlands always exercise in this House.
I regret that the hon. Member for Dundee, East (Mr. G. M. Thomson) should have felt that there had been obstruction in this matter. Everybody is given a right under the Acts to defend their own interests, and a period is given for objections once a scheme has been published. It is everybody's right to avail themselves of that period. I would say in passing that the actual cost of the inquiry is unlikely to exceed £100. The hon. Gentleman talked about delay costing £1½ million. That is something which the Government are grappling with, 970 and the right way is to deal with inflation and not deny private citizens their rights in matters of this description.
§ Mr. Macpherson
That is not involved in this Prayer against this scheme. It is not part of the scheme.
We have to bear in mind that the procedure laid down in the 1943 Act gives very full protection. In this case an inquiry was held. It lasted five days, and thereafter the Secretary of State for Scotland (Mr. Maclay) examined the scheme in great detail. Objectors who wanted the scheme withdrawn might naturally be expected to marshal every possible technical and economic argument against it. The Commissioner concluded, however, in paragraph 9 of his Report:I am clearly of the opinion that the evidence fully justified the Board's view that this scheme was necessary if the estimated demand for electricity was to be met in 1961–62 and beyond.There are really three main grounds on which any hydro-electric scheme could be opposed: first, that the particular scheme proposed is uneconomic or unnecessarily destructive of amenity or fisheries—that is, that this is not the right hydro-scheme to propose and in this case, these objections were discussed in the inquiry; secondly, that the particular scheme is not needed because there is already a sufficiency of power available to meet demand. That has not been contended this evening, although the hon. Member for Caithness and Sutherland (Sir David Robertson) came near to saying just that, because he advocated a halt being called to expansion. I do not think anyone has seriously contended that increased electricity production was not required to meet the increase in demand, which is likely to be of the order of 10 per cent. per annum as estimated by the Board, resulting in rather more than doubling the consumption of electricity within the next ten years.
The third ground is that the anticipated increase in demand could be better met by a form of generation other than hydroelectricity—that is, that this is not the right kind of generation.
My hon. Friend tonight has based his argument entirely on this ground. We are all aware that the initial capital cost 971 of a hydro-electric scheme in relation to kilowatts sent out is high in comparison with what are sometimes called "fossil fuel" stations—that is, those burning coal or oil. It has been argued that in a period when there is a shortage of capital for investment it would be wiser to invest in a form of generation with a lower initial cost, even though it might not last for a third of the time which a hydro-electric plant can be expected to last.
We have to work on certain assumptions in preparing a scheme like this, but it is worth bearing in mind that the cost of a hydro-electric station set up in Galloway in the 1930s was about 0.2d. per unit and the cost is still 0.2d., but the cost of steam stations put up about the same time with the same cost per unit which now have been relegated to use at peak periods, that is supplementary production steam stations, is four times as great. That is a relevant consideration which we should bear in mind.
In any case, there is one strong objection to this point of view. Because of the unevenness of daily demand, neither steam nor nuclear stations can give us by themselves all the electricity at the time of day required nearly so cheaply as in combination with hydro-electric schemes. Why is that? If steam stations were constructed to meet intermediate or peak load they would be operating at higher unit cost than hydro-electric generating stations of a similar power. In the North of Scotland district the average cost of electricity provided from hydro-power alone last year was under 0.6d. per unit, whereas the average cost of electricity from both hydro-power and steam was 0.7d. The estimated cost of electricity to be produced by the Strathfarrar scheme is 0.75d. per unit. This compares with a total average cost of electricity generated in England and Wales in 1956–57—and it has gone up since—of 0.86d. per unit. This illustrates how much more favourable hydro-power is for this structure of the load, and the benefit of hydro-electric schemes which can be turned off and on at short notice.
§ Mr. Humphrey Atkins (Merton and Morden)
Is my hon. Friend assuming that the scheme will cost £14¼ million, 972 as estimated, or a great deal more, as my hon. Friend the Member for Caithness and Sutherland (Sir D. Robertson) has indicated has been the case with every scheme in the past?
§ Mr. Macpherson
I was coming to that point. While it is quite true that with schemes prepared some years ago when there was no experience of post-war conditions the final cost was very greatly in excess of estimates for reasons beyond the Board's control, in later schemes final costs have been very much nearer estimates. For example, the final cost of the Shin scheme now nearing completion, as estimated in March, 1958, was £8,900,000, as against an estimate made in 1953 of £8,800,000, an increase of only £100,000. I hope, therefore, that my hon. Friend will take comfort from that. In any case, there is no doubt that a hydro-electric scheme is ideally suited to meet intermediate and peak loads and this is just what Strathfarrar is designed to do. One of the advantages of hydroelectric schemes is that they can be designed to meet a load best suited for a particular purpose.
My hon. Friend has argued that the Board should provide the 100,000 or so kilowatt capacity needed to meet the anticipated growth in demand by way of a pumped storage scheme, and he has mentioned the very low figure of capital cost per kilowatt estimated for the Loch Awe scheme. One of the Board's main reasons for promoting the Awe scheme is that it is expected that by the time it is completed in 1964–65 there will be available both cheap supplies of base load power to do the pumping and also a demand for the peak power produced. Until then these conditions will not be fulfilled. I can assure my hon. Friend that the anticipated base load production from Hunterston is fully committed in the early years of its operation.
§ Mr. Nabarro
What about all the other base load stations in Scotland, including two at Portobello, Edinburgh, which are being used hardly at all in the night hours? They should be linked to further pumped storage stations.
§ Mr. Macpherson
My hon. Friend will realise that there are always stations which are getting out of date, and, indeed, steam stations—
§ Mr. Macpherson
There is always a proportion of the stations available to an electricity authority which are getting out of date, and that means that they are relegated to secondary status and the newer stations come on to supply the base load at the higher load factors.
As I said, until 1964–65 the conditions that are necessary to make a success of a pumped storage scheme will not be fulfilled. What the Board needs by 1962 is 100,000 kilowatt of intermediate load power, and this can be provided by the Strathfarrar scheme.
My hon. Friend quoted from what Mr. Tom Johnston said. I would remind my hon. Friend that what Mr. Johnston said was "If they put in their Hunterston station and have more power than they want at night, we can take it." They are puting in the Hunterston station, but I can tell my hon. Friend that at that period there will not be the surplus power at night. So the second condition is not fulfilled.
The second point that my hon. Friend raised was transmission over a distance. Of course, it is possible to transmit over a distance, but the capital cost of new transmission is £25,000 per mile for up to 500,000 kilowatt; that is. £1 million for 40 miles. If we assume that the distance from Hunterston to Strathfarrar is about 200 miles, the extra cost would be in the region of £5 million.
§ Mr. Nabarro
What is the distance from Hunterston to Loch Awe and what is the cost entailed? It is no good quoting one in isolation from the other. Let us have both of them.
§ Mr. Macpherson
Perhaps my hon. Friend will study the map of Scotland a little batter than he has apparently done. If he will look at the map he will find that Loch Awe is not much more than half the distance, if as much, from Hunterston as is Strathfarrar.
It should be realised that it was at least as much the search for a means of providing a continuous outlet for the output of large steam and nuclear power stations as the difficulty of providing peak load economically that led to pumped storage schemes being thought of at all. I cannot emphasise too strongly that what commends a pumped storage scheme as an economic proposition is the combination of the availability of cheap base load 974 electricity for which there is no other use and the need for peak load supplies which are extremely expensive to produce from steam or nuclear power. I confirm the figures given by the right hon. Gentleman regarding comparable cost from a nuclear station of producing electricity at a load factor of 29 and the cost from Strathfarrar. He is quite right in saying that it would be of the order of 1.63d. per unit as compared with 0.75d. per unit.
My hon. Friend suggested that the power might have been obtained from Dundee, and he said that it was on the grounds only of financial stringency that the proposal to put up a nuclear power station in the North of Scotland was postponed. I do not know why he should have said that and I do not know what grounds he had for saying it, but the fact is that a site for a station has been surveyed, not in the constituency of the hon. Member for Dundee, East, but in the constituency of my hon. Friend the Member for Aberdeenshire. East (Sir R. Boothby). I am afraid that once again my hon. Friend has got his geography a little wrong. In any case, there is no comparison with the labour. I confirm the figures given, that the Board is using about 80 per cent., and never less than two thirds, Scottish labour.
The main point is that the stations have to be erected at the times and to fulfil the needs which are required. The North of Scotland Board intends to construct a nuclear station in the north-east of Scotland, but it had never intended to do so before 1965, as my hon. Friend will see if he looks at the documents, because the conditions for a nuclear station in that area will not be fulfilled until then. Until that time, there will not be adequate demand for base load electricity in that area to justify a nuclear station. These things are a matter of timing.
My hon. Friend said that we should not treat this proposal as a matter for the Highlands alone. I absolutely agree with him. This is a matter for the whole country, but the economic situation of the Highlands is a matter for the whole country. Indeed, that is why we had the 1943 legislation.
In any case, I can assure my hon. Friend that not only is there the closest co-operation between the North of Scotland and the South of Scotland Boards, but there is also the closest examination 975 of the Board's requirements and capital investment considerations at a national level. The South of Scotland Board has agreed with the North of Scotland Board what additional supplies of peak load electricity should be provided by the North of Scotland Board in the next few years and what base load off-peak supplies it is expected to be able to make available for pumped storage, and when.
In those circumstances, I hope that I have said enough to convince my hon. Friend that, while I thank him for bringing forward this Motion in the interest of both the country as a whole and of the Highlands, this is the best way to